A Chelmsford man who won $100 million in federal construction contracts by saying that his construction company was owned by disabled veterans was found guilty of fraud by a federal jury in Boston Wednesday.
Prosecutors said David Gorski recruited two veterans to stand in as the majority owners and top executives of his construction firm so it could win federal contracts that give preference to veteran-owned companies.
In reality, prosecutors said, Gorski controlled Legion Construction as it won numerous Army, Navy and US Department of Veterans Affairs contracts from 2006 to 2010.
Gorski paid himself salaries as high as $356,000, according to court documents, and also paid his wife — who worked full-time for the town of Chelmsford — $400 a week.
Gorski was convicted of four counts of wire fraud and one count of conspiracy to defraud the government. He is scheduled to be sentenced in September, and could face up to 25 years in prison.
Tracy Miner, a defense attorney who represented Gorski, said her client was let down by others' bad advice.
"This is one of the rare times when the jury got it wrong," Miner said in a statement. "The undisputed evidence showed that he consulted outside accountants and lawyers throughout and that nobody ever advised him to do anything differently."
The figurehead president of Legion was Joseph Steen, an infirm Korean War veteran whom prosecutors said spent most of his time sleeping or watching television. Another disabled veteran, Peter Ianuzzi, who served as a Marine in the 1990s was brought aboard later and worked for the company but did not run it.
Government regulations mandate that a "Service-Disabled Veteran-Owned Small Business" must be majority-owned and managed by veterans who became disabled while serving in the military to receive preferential awards of federal contracts.
Increased federal oversight of the program prompted Gorski to restructure his company twice, eventually handing over 51 percent of its stock to Ianuzzi. But he sought to retain his control over the firm and his high pay, prosecutors alleged, and wrote to his personal attorney Elizabeth Schwartz seeking advice on how to do so.
"As the founder and financial backer of this company as well as the primary managing partner, I would like to maintain executive rights to daily decision making which is somewhat [tricky] under the new requirements," Gorski wrote in an e-mail to Schwartz, which was submitted as evidence after an appeals court panel ruled that his communications with various lawyers was part of his fraudulent scheme and therefore not privileged.
In 2010, another construction firm challenged Legion's veteran status after it won a contract for work at a VA facility in Vermont. Prosecutors said Gorski, while being advised by Mintz, Levin, Cohn, Ferris, Glovsky, and Popeo, "filed an opposition to the bid protest that contained false information."
Prosecutors said Gorski claimed Ianuzzi had become the company's majority shareholder before the enactment of the new, tighter federal regulations, when it actually happened two months after the new rules took effect.
The appeals court found " the new corporate documents were crafted so as to make it appear that they were signed before the date of the [new regulations], when they were not ... Gorski likely knew that his lawyers' handiwork could lead [federal administrators] to believe that which was false."
A spokeswoman for Mintz Levin emphasized that the court found no wrongdoing by the firm. "Lawyers, as other outside professionals, must rely on the veracity of the information provided to them by their clients in preparing legal documents regarding the client's own past actions."